Servo system (servo motor and servo drive) revenues in the Chinese market increased by an estimated 26.8% in 2006, according to a new report published by IMS Research. The Chinese servo system market was estimated to be $361.6 million in 2006. The market is forecast to maintain steady growth to reach about $953.8 million in 2011.

Servo systems account for over 80% revenue of the total motion controls market in China. As the main impetus of growth to motion controls market, servo systems are expected to grow at a CAGR of over 20% in terms of revenue in next 5 years. In contrast, stepper systems are forecast to grow at a modest 10% CAGR in terms of revenue over the same period. Although the servo systems market is enjoying excellent growth, the competitive environment is rapidly evolving. The existing market framework, in which Western, Japanese and local suppliers seldom compete directly and primarily focus on a dedicated market, is changing due to Taiwanese and Korean companies’ entry to this market in recent years. Local Chinese suppliers are facing more pricing pressure due to the entry of relatively low priced Taiwanese and Korean products.

Market analyst, Reggie Li commented: “Although the competitive environment of the Chinese servo systems market has changed dramatically in recent years, Chinese suppliers still have potential to increase their market shares quickly in next five years. Chinese suppliers are getting mature both in technology and sales channel development. Government aid through R&D funds also helps the Chinese companies to develop more advanced products which will help these companies compete on something other than price.”